Analysts from the leading French bank, Societe Generale, told investors that a bailout of the Greek debt would send the eurozone bloc into a financial crisis, risking a “double-dip” recession of the member states. The European Union, led by Germany and France, has tentatively agreed to rescue Greece, but details are still vague. A bailout plan faces strong opposition but may prove to be the lesser of two evils, the other alternative being letting Greece default on its obligations, which would surely shock all of eurozone — something nobody wants to see happen.
In a broader sense this is another failure of Europe’s socialist mentality. Back when an unifying European currency was proposed, it was seen as a matter of pride and power, for European nations to cooperate and coalesce into a bigger economy to rival that of the U.S., China, Japan, and India. Yet there exists a significant fiscal discrepancy between the eurozone members. In the case of Greece, its 2009 budget deficit could be as high as 13% of its GDP. Contrast that to the E.U. ceiling of 3% and you know why there’s opposition.If things don’t go well then it’s the German and French taxpayers that are on the hook. Obviously there are wealthy members and poor members in the zone, and this aid to Greece may be the beginning of more bad things to come in the bloc…
